Question

Are closing costs tax deductible? I recently refinanced and I would like to deduct closing costs for a mortgage refinance but I am not certain this is allowed by the IRS.

Answer

You can only deduct closing costs for a mortgage refinance if the costs are considered mortgage interest or real estate taxes. You closing costs are not tax deductible if they are fees for services, like title insurance and appraisals.

You can deduct these items considered mortgage interest:

  • Mortgage insurance premiums — for contracts issued from 2012 to 2017 but paid in the tax year
  • Points — since they’re considered prepaid interest. You must usually allocate points over the life of the loan.

You can’t deduct your mortgage insurance premiums if your adjusted gross income (AGI) is more than:

 

Related Topics

Related Resources

Are Political Contributions Tax Deductible? | H&R Block

Are political contributions tax deductible? Before signing a check, learn the difference between charitable giving and political donations at H&R Block.

10 Ways Getting Married Affects Your Taxes in 2018

What happens to your taxes after marriage? Learn how marriage can lead to changes in tax filing and returns at H&R Block.

Charitable Giving Around the Holidays

Learn more about the potential tax benefits of charitable holiday giving. Your holiday donations may boost your refund, depending on the organization.

What Is Virtual Tax Preparation?

Virtual tax preparations let you complete your taxes online from the comfort of your home. Find out how easy remote tax preparations can be at H&R Block.